Real Estate Is Soaring, But Not Like 2008

By
Real Estate Agent with HomeXpress Realty SL3199320

 

 

Unlike last year, the residential real estate market kicked off 2020 with a bang! In their latest Monthly Mortgage MonitorBlack Knight proclaimed:

“The housing market is heating entering 2020 and recent rate declines could continue that trend, a sharp contrast to the strong cooling that was seen at this same time last year.”

Zillow revealed they’re also seeing a robust beginning to the year. Jeff Tucker, Zillow Economist, said:

"Our first look at 2020 data suggests that we could see the most competitive home shopping season in years, as buyers are already competing over…homes for sale.”

Buying demand is very strong. The latest Showing Index from ShowingTime reported a 20.2% year-over-year increase in purchaser traffic across the country, the sixth consecutive month of nationwide growth, and the largest increase in the history of the index.

The even better news is that buyers are not just looking. The latest Existing Home Sales Report from the National Association of Realtors (NAR) showed that closed sales increased 9.6% from a year ago.

This increase in overall activity has caused Zelman & Associates to increase their projection for home price appreciation in 2020 from 3.7% to 4.7%.

Are we headed for another housing crash like we had last decade?

Whenever price appreciation begins to accelerate, the fear of the last housing boom and bust creeps into the minds of the American population. The pain felt during the last housing crash scarred us deeply, and understandably so. The crash led us into the Great Recession of 2008.

If we take a closer look, however, we can see the current situation is nothing like it was in the last decade. As an example, let’s look at price appreciation for the six years prior to the last boom (2006) and compare it to the last six years:Real Estate Is Soaring, But Not Like 2008 | MyKCMThere’s a stark difference between these two periods of time. Normal appreciation is 3.6%, so while current appreciation is higher than the historic norm, it’s certainly not accelerating beyond control as it did leading up to the housing crash.

Today, the strength of the housing market is actually helping prevent a setback in the overall economy. In a recent post, Odeta Kushi, Deputy Chief Economist for First American explained:

“While the housing crisis is still fresh on the minds of many, and was the catalyst of the Great Recession, the U.S. housing market has weathered all other recessions since 1980. With the exception of the Great Recession, house price appreciation hardly skipped a beat and year-over-year existing-home sales growth barely declined in all the other previous recessions in the last 40 years…In 2020, we argue the housing market is more likely poised to help stave off recession than fall victim to it.”

Bottom Line

The year has started off very nicely for the residential housing market. If you’re thinking of buying or selling, now may be the time to get together to discuss your options.

Find a Home For Sale In Our Area (Click Here)

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Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Ginger Harper 03/11/2020 01:22 PM
Topic:
Real Estate Sales and Marketing
Location:
Florida Hillsborough County Valrico
Tags:
valrico florida
valrico fl real estate for sale
real estate is soaring
but not like 2008

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Rainmaker
1,912,151
Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

We would be setting records if we could find more listings! Hopefully these low rates will encourage more Sellers to enter the Market 

Mar 04, 2020 06:31 AM #1
Rainmaker
242,154
Rick Frissell
HomeXpress Realty - Valrico, FL
aka "The Red Baron of Real Estate"

You are so correct Michael J. Perry .  How many times I have explained that 1.6 inventory ratio is the same as leaveing money on the table.

Mar 04, 2020 05:00 PM #2
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Rainmaker
242,154

Rick Frissell

aka "The Red Baron of Real Estate"
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